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After the official establishment of the Football League in 1888, the financial gains from the sport primarily went to club owners. It wasn’t until nearly 70 years later that an Italian, Gigi Peronace, a translator for British managers in Italy, became one of the first to capitalize on the sport’s increasing popularity in Europe and identify a potential market.
In 1957, Peronace played a crucial role in facilitating the historic move of John Charles from Leeds to Juventus for a record-breaking fee of £65,000. This was made possible by taking advantage of the wage differences between the two nations. While players in the UK were subject to salary caps, Italian clubs could offer more attractive contracts, as evident by Charles receiving a £10,000 signing bonus compared to the standard £100 in the UK.
In 1961, the decision to eliminate the maximum salary in English football had a major impact on the attractiveness of playing in the country. This change led to a 61% rise in the average wages of footballers by 1964. As a result, agents gained more influence and became crucial allies for players. This period marked a significant increase in the professionalization of the sport and opened up greater opportunities for earning potential for those involved.
The introduction of paid television in 1992 changed the way people watched sports, as it brought in subscription models. This increase in broadcasting income benefited teams and their players, as well as agents who could now earn more through higher player salaries. In 1995, the Bosman ruling revolutionized the transfer process and gave players more bargaining power by allowing free agents to negotiate for higher wages, which also increased the commission potential for agents.
The increasing influence of agents also reaches the lower divisions of football, although the amounts involved are significantly different from those in the Premier League. The representation of players is crucial in preventing a return to a historically imbalanced distribution of power. However, it must be balanced with the sustainability of clubs in a world where losses are often driven by the growing costs of player salaries and agent demands, even in the Premier League. In my personal experience, agent fees have varied from a fixed amount of several thousand pounds to a percentage of the player’s earnings, with some agents claiming they will only work for a minimum of 10%.
At our level of the game, deals are not particularly complex or intriguing. There are only a few factors to consider and negotiations should be simple – such as whether there is a fee involved, the amount of the salary, the duration of the agreement, any potential bonuses, and if there is a sell-on fee. One manager even mentioned that my summary is too complicated because most players are mainly concerned about their “wages and days off.”
In other industries, positive negotiations are an opportunity to enhance long-term reputations and are generally grounded in professionalism and mutual trust. This is often impossible in football as the same agents come around infrequently. I was surprised to discover that the bar on becoming an agent with Fifa is spectacularly low, with only a background check, a fee and a test of 20 multiple‑choice questions (open book) being required for certification.
This ease of market entry leads to a varying range of quality of individuals we encounter. Conflicts of interest are endemic if the agent’s remuneration is dependent on getting a deal done rather than necessarily what is best for the player or the club.
A major obstacle is the way teams approach players. While it may be technically against the rules, it is logical to make an initial inquiry to avoid wasting time if a player has no interest in transferring. However, issues arise when clubs work together to divert a player’s attention or negotiate terms before their current club has even discussed the possibility of them leaving.
A player’s decision can be greatly influenced by the possibility of a substantial salary increase and potentially receiving a signing bonus from their agent. In these situations, everyone involved tends to overlook the fact that there is already a confidential contract in place. I was recently informed by an agent about the terms they had discussed with a potential new club, while a club executive disclosed confidential information from the player’s contract. This could be considered a violation of the contract, but it is primarily careless, unethical, and unprofessional behavior.
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A potential issue in the market exists in industries where certain components are gaining more value than the actual benefit they provide. According to Fifa, in the year 2023, clubs spent $888 million on agent service fees, which was a 42.5% increase from the previous year. English clubs accounted for $280 million of this total amount.
In order to align the financial incentives of players with the long-term sustainability of the sport, I have several recommendations for the new football governing body. This includes implementing a salary limit in collaboration with the Professional Footballers’ Association and the Football League, which would be based on comparisons to other European markets in order to maintain competitiveness within our leagues. The limit could be set at a level that allows for players to be rewarded for their abilities and drive (such as £2,000 per week in League Two), enabling them to progress to higher levels.
This system would allow clubs to acquire up to three “marquee” players without being restricted by the cap, similar to the method used by Major League Soccer in the United States. This offers the benefit of being simpler to implement compared to financial fair play rules.
Implementing a cap could lead to a uniform salary and business deals process throughout various levels of the league, eliminating any perceived complications and competing interests. Another improvement could involve giving former players the necessary training and expertise to take on agent roles. This would redirect agent fees to the PFA, ultimately benefiting retired players and potentially contributing to their pension plan.
This strategy not only guarantees a more equitable allocation of resources, but also secures that those who have committed themselves to football will still reap the rewards of the sport’s success.
Source: theguardian.com
